PCE moved forward rapidly in Feb, no doubt raising tracking forecasts for Q1GDP. Importantly, it seems that while the decline in energy consumption has slowed, it has not reversed.

Regardless of what happens with the weather we should expect the official measures of energy consumption to turn north hard as the winter passes. In short, low heating during the winter  cut deeply into consumer spending measures.

However, as we pass into the Spring the seasonal adjustment will except heating expenses to fall away anyway, so it will no longer count against consumer spending estimates. This will be reflected as boom.

About these ads